Input tax credit for goods and services purchased prior to VAT registration

All businesses domiciled in Oman whose supplies exceed OMR 38,500 in the past 11 months and the current month are subject to compulsory tax credit under Oman VAT. You need to register. Let’s also assume that the company expects its total deliveries for the current month and the next 11 months to exceed the required registration threshold of OMR 38,500. In this case, you will also need to register for Omani VAT.

Registration is not allowed in any case if the price of the supplies is below the registration threshold. In the future, if the value of your goods or expenses exceeds the registration criteria, you can apply for VAT registration.

This creates a situation where a company was not registered on the VAT introduction date of 16 April 2021, but over time exceeds the established threshold and becomes registered under Omani VAT. will occur.

There are two phases for such companies: pre-registration and post-registration. At the pre-VAT registration stage, he was required to pay VAT on the purchases/expenditures but could not recover the input VAT. This is because only registered companies could receive input tax refunds. At the post-registration stage, on taxable goods he can charge his VAT at 5% and recover the input tax amount paid on the purchases/expenses.

The post-registration stage is clear, but what happens to the VAT paid on purchases or expenses paid during the pre-purchase stage?Can a business recover the VAT paid before VAT registration?

The answer is yes. Omani VAT law allows for the refund of input taxes paid on goods, services and imported goods prior to his VAT registration. However, there are certain conditions that a business must meet in order to claim input tax credit for such purchases or expenses.

Let us examine the requirements for obtaining input VAT reimbursement for goods and services acquired prior to VAT registration.

Deduct taxes from products you bought before registering for VAT.
Businesses that meet the following requirements can deduct the input tax paid on products imported or provided to the taxable person prior to the registration’s effective date:

When counting backward from the registration date, the items are imported or supplied to the firm and remain usable as of the registration date. This time cannot exceed three years.

According to the legislation and rules, businesses are allowed to deduct input tax on certain commodities. A fundamental principle is that products and services are utilized to create taxed or used in the course of doing business.

Deduct taxes on services that were acquired before to registering for VAT.
Under certain circumstances, a Taxable Person may deduct input tax paid on services rendered to them prior to the registration’s effective date.

The services are supplied to the taxable person within a period not exceeding 6 months prior to the effective date of registration

The person has the right to deduct input tax on these services is in accordance with all the provisions of the law

You can also Register for VAT Registration on our website:

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